US job cre­ation re­mains solid

A FI­NAL glimpse of the US econ­omy be­fore this week’s bit­terly fought pres­i­den­tial elec­tion de­liv­ered a pic­ture of rel­a­tive health, with job cre­ation up and unem­ploy­ment fall­ing.

The jobs re­port for Oc­to­ber showed the United States adding a solid 161,000 new po­si­tions while the job­less rate fell to 4.9 per­cent, ac­cord­ing to La­bor De­part­ment fig­ures. The re­sults ap­peared un­likely to lift the for­tunes of ei­ther Democrat can­di­date Hil­lary Clinton or Repub­li­can Don­ald Trump. Ap­pear­ing in New Hamp­shire, Mr Trump dis­puted the ac­cu­racy of the re­sults and called them “an ab­so­lute disas­ter”.

“Peo­ple are stop­ping. They’re not look­ing for work any more be­cause they can’t get a job,” he said.

At a rally in Pitts­burgh, Penn­syl­va­nia, Ms Clinton took a di­a­met­ri­cally op­posed view.

“We got some good news this morn­ing. Our econ­omy cre­ated 161,000 jobs last month. That is 73 straight months of job growth,” she told sup­port­ers.

An­a­lysts agreed with Ms Clinton’s view and said the jobs re­port showed steady mo­men­tum in the world’s largest econ­omy, with the La­bor De­part­ment re­vis­ing up­ward its job cre­ation num­bers for Au­gust and Septem­ber by a to­tal of 44,000 po­si­tions, tak­ing the av­er­age for the past three months to a strong 176,000 new jobs. Wages also saw their strong­est gain in seven years, as av­er­age hourly earn­ings rose 2.8pc year-on-year to US$25.92.

The unem­ploy­ment rate was lit­tle-changed from prior months, re­turn­ing to the level recorded be­tween June and Au­gust. How­ever, the job­less rate among His­pan­ics fell sharply to 5.7pc from 6.4pc.

De­spite steady job cre­ation, the re­cov­ery has not eased the per­sis­tent anx­i­eties of many in the elec­torate.

Labour force par­tic­i­pa­tion was lit­tle changed in Oc­to­ber at 62.8pc and the num­ber of long-term un­em­ployed was steady at 2 mil­lion peo­ple, about one quar­ter of to­tal unem­ploy­ment.

The White House touted the jobs data, cit­ing what it called “the long­est streak of job growth on record”, but of­fered the cus­tom­ary ac­knowl­edge­ment that the bat­tle was not yet won.

“US busi­nesses have now added 15.5 mil­lion jobs since early 2010,” Ja­son Fur­man, chair of the Coun­cil of Eco­nomic Ad­vi­sors, said.

Busi­ness ser­vices and health­care saw strong gains last month, adding 43,000 and 31,000 po­si­tions re­spec­tively, with health­care hav­ing grown by more than 400,000 po­si­tions over the pre­vi­ous 12 months.

Pol­i­cy­mak­ers at the US Fed­eral Re­serve have so far held off rais­ing US in­ter­est rates dur­ing 2016, hop­ing to avoid in­ter­rupt­ing a frag­ile re­cov­ery, a po­si­tion they reaf­firmed this week. How­ever, they have sig­nalled their in­ten­tion to in­crease rates as soon as De­cem­ber.

Fed­eral Re­serve vice chair Stan­ley Fis­cher said he be­lieves the econ­omy is nearly at full em­ploy­ment and will con­tinue to grow at a moder­ate pace.

The em­ploy­ment and growth out­looks are key fac­tors in whether the US cen­tral bank in­creases the bench­mark in­ter­est rate next month, af­ter pol­i­cy­mak­ers de­cided to stand pat in their meet­ing this week.

How­ever, in his re­marks to an In­ter­na­tional Mon­e­tary Fund eco­nomics con­fer­ence, Mr Fis­cher gave no real hints about whether the Fed would move at its De­cem­ber 13-14 meet­ing, a year af­ter the first and only post-cri­sis rate in­crease.

“The mar­kets put a prob­a­bil­ity of above 70pc on the rate be­ing in­creased in De­cem­ber,” he said.

In­fla­tion has been stub­bornly low, which has been a main fac­tor in the Fed’s ret­i­cence to raise rates. How­ever, the pol­icy state­ment is­sued last week in­di­cated again that of­fi­cials ex­pect in­fla­tion to move higher, as the im­pact of lower oil prices and a strong dol­lar dis­si­pates.

“It can be ex­pected to rise fur­ther to­wards our 2pc tar­get, sup­ported by higher core PCE in­fla­tion, which ran at a 1.7pc pace in Septem­ber,” he said.

Chris Wil­liamson, chief busi­ness econ­o­mist at IHS Markit, said the new jobs data made a De­cem­ber rate in­crease more likely, and ini­tial es­ti­mates for US growth in the third quar­ter show the econ­omy had ex­panded by 2.9pc, a sign of re­gained mo­men­tum. –